Despite Lenovo’s recent bet on smartphones, its PC sales are up

Even as the demand for laptops and desktop computers has gone down, Lenovo, the biggest PC manufacturer, reported a 29% growth in its third quarter. The Chinese firm marked a profit of $265.3 million in the third quarter, as compared to the $205 million a year earlier.

Lenovo’s profits grew beyond analysts’ prediction of $247.2 million, said the firm which registered profits from both the PC and smartphone businesses. The firm has also noted that its immediate-term could be affected by its recent $2.9 billion acquisition of Motorola’s smartphone business and $2.3 billion of IBM’s low end servers. “In the short term (the deals) will have a negative impact on performance,” said Yang Yuanqing, CEO of Lenovo.

Even if the shipping of Lenovo’s PCs went up by 6.6% in the last three months of 2013, this is something pretty alarming for the PC business. Lenovo knows that PC sales are unlikely to rise forever, and thus it has bet on smartphones and tablets. Lenovo recently became the world’s fifth-largest smartphone manufacturer.

As Sony recently announced that it’s quitting the PC business; Lenovo and other OEMs seem to be revising their priorities. Where do you think the PC business is headed?